By Lalitha Kunaratnam

KUALA LUMPUR, Malaysia--Malaysia is slipping in its efforts to tackle money laundering risks, says a Swiss corruption watchdog, Basel Institute on Governance.

Malaysia ranked 45th among 110 countries on the Basel Anti-Money Laundering (AML) Index 2021, released on Monday.

The country’s money laundering risk score increased from 5.25 to 5.47 out of 10 (highest risk score) while the global average score increased to 5.3 from 5.22.

The report also mentioned Malaysia, China and Myanmar are facing significant human trafficking risks.

Last year, Malaysia was in 65th position among 141 countries while 62nd in 2019 among 125 countries.

With a score of 4.65, Singapore ranked 78th while Indonesia in 76th position with a score of 4.68.

The 10th edition of the Basel AML Index report assessed money laundering and terrorist financing threats around the world and the capacity of jurisdictions’ anti-money laundering and counter financing of terrorism measures to address their risks.

The index assessed risk scores based on 17 indicators under five domains – quality of anti-money laundering and counter financing of terrorism framework, corruption risk, financial transparency and standards, public transparency and accountability, legal and political risks. Where 0 indicates the lowest risk and 10 indicates the highest risk.

Haiti, Democratic Republic of the Congo, and Mauritania have the highest risk of money laundering, while Andorra, Finland and Cook Island have the lowest risk.

The report highlights the following as well: -
(a) Inadequate respond to the threats arising from virtual assets such as cryptocurrencies;
(b) Ineffective implementation of beneficial ownership registries around the world, which continue to provide safe havens for dirty money
(c) Jurisdictions consistently scoring worse for preventive measures and
(d) The role of intermediaries such as lawyers and accountants, who can be exploited by criminals and corrupt individuals wishing to launder their money.

*Lalitha Kunaratnam is an anti-corruption activist who believes policymakers need to step up their game and make plans for serious reforms*